]]>TORONTO — It was about eight years ago that Brooke Robinson bought a critical illness insurance policy due to her family’s history of breast cancer, only to trigger it six years later for an entirely different and unexpected reason.

“I actually ended up with multiple sclerosis and it was a very aggressive version of it,” says Robinson, 33.

“I was diagnosed in April of 2015 and by October of 2015 I was walking with a cane.”

Today, she credits her critical illness payout for allowing her and her husband to take three months off work so they could move from Toronto to Ottawa where she underwent an experimental procedure that has allowed her to walk again without assistance.

While Robinson’s workplace disability insurance made up for some of the couple’s lost income, she says it wouldn’t have been enough to cover the $15,000 of extra expenses they incurred.

“Without the treatment I had, I would be in a wheelchair right now and I wouldn’t be able to work or be in an office,” she says. “We would have had to sell our house and move into a condo. It would have been a disaster.”

Critical illness insurance may be effective at covering costs that disability insurance doesn’t.

Financial planner Rona Birenbaum says the most compelling reason to buy a critical illness policy would be if someone isn’t eligible for disability insurance — for instance, a stay-at-home parent who doesn’t have an income to replace.

But it could also help someone unprepared for the financial hardships that may come with a critical illness diagnosis such as the cost of medical treatment or for a spouse to take time off work.

Unlike disability insurance, which protects your income to age 65 and generally kicks in after 90 days of disability, critical illness insurance pays out a lump sum in the event of critical illnesses such as cancer, a stroke or a heart attack.

“If you find yourself incurring a large expense and your expenses don’t allow you to build an emergency fund, then critical illness insurance becomes that line of defence for those that don’t want to cash in their RRSP and undermine their long-term savings,” says Birenbaum, founder of Toronto-based firm Caring for Clients.

A potential downside is that to receive a payout you must often meet very strict and specific definitions of disease, says Dan Hallett, vice-president of HighView Financial Group in Oakville, Ont.

Another caveat, adds independent insurance broker Lorne Marr of LSM Insurance in Markham, Ont., is that to get a critical illness lump sum you also have to survive a waiting period, which is normally 30 days. The nature of critical illness insurance also means that those relying solely on it won’t receive any more money beyond the lump sum.

Like Birenbaum, both Hallett and Marr say that critical illness insurance should not be used as a replacement for disability insurance.

Birenbaum says critical illness insurance premiums can be expensive. A $200,000 policy with a 15-year term for a healthy 35-year-old man would cost about $80 a month.

“It really becomes about what’s affordable and it never makes sense to over-insure because you’re a scared person,” she says. “If you’re talking about a lump sum amount that would make a difference to someone, we’re probably talking about $50,000.”

As for Robinson, she says because she purchased her critical illness policy at the age of 25, it only ended up costing her $6 a month in premiums.

“That’s a couple of cups of coffee,” she says. “It’s well worth the security and the safety of not having to worry about finances when something tragic is happening in your life.”

]]>http://www.moneysense.ca/spend/insurance/when-buying-critical-illness-insurance-makes-sense/feed/0Should I buy terrorism insurance for my next trip?http://www.moneysense.ca/spend/insurance/travel-insurance/terrorism-insurance/
http://www.moneysense.ca/spend/insurance/travel-insurance/terrorism-insurance/#respondMon, 10 Jul 2017 21:03:33 +0000http://www.moneysense.ca/?p=193017What coverage is available and is it right for you?

]]>If you listen to the nightly news you know how prominent terrorism attacks are around the world. If you want to be prepared in case the worst happens to you, you might want to see it get included in your trip cancellation travel insurance. It won’t help you in the event you’re kidnapped, but it will cover the cost of trip rescheduling to avoid unexpected actions by the likes of Al Qaeda, ISIS or Boko Haram.

If you look into terrorism insurance, you’ll find that it’s seeing a lot more interest but there is considerable confusion as well, says Rhonda Podger, manager of Special Benefits Insurance Services, a brokerage service. “Everybody’s asking about it,” she says. “Policy details need to be addressed in black and white to make terrorism insurance coverage a little clearer for travellers.”

The main reason for buying terrorism insurance is simple; it comes down to the fact that terrorist attacks are generally unpredictable, and having the right terrorism coverage with your trip cancellation and interruption travel insurance can make some of us feel safer and more comfortable abroad. Here’s what you need to know to ensure you’re covered.

What is it?

Terrorism insurance coverage is covered by trip cancellation travel policies. It allows you to cancel or interrupt your trip if a terrorism attack happens in a city listed on your itinerary within a certain number of days of your trip’s scheduled departure date. And like most insurance, whether you are covered or not comes down to the event being either unforeseen or already known.

Definition of a terrorist event

For insurance companies, a terrorist event is when an organized terrorist group injures or kills people or damages property to achieve a political, ethnic or religious goal or result.

Where do I buy terrorism insurance?

It’s available on almost all travel credit cards. If you don’t have one, a cancellation policy that includes terrorism protection can also be purchased from an insurance provider at the time you’re booking your trip or very soon afterwards.

What does it do?

Its aim is to cover the cost of cancelling your trip before you leave, or getting you home if something unforeseen happens—like a terrorist attack— while you’re away. So it’s important to understand the coverage on your credit card, and what extra trip cancellation insurance you may have to buy, preferably before you book a trip. “If you don’t understand the details of a trip cancellation policy yourself, contact the insurance provider or underwriter [who] will walk you through it,” says Dan Keon, director of marketing and communications at Allianz Global Assistance.

Civil unrest vs terrorism

Trip cancellation and interruption insurance generally provides coverage for trip cancellation and trip interruption when there’s a terrorist incident at your destination within 30 days of arriving. If there’s a terrorist event while you’re there, you can interrupt your trip and travel insurance will cover unused non-refundable expenses plus extra expenses for you to return home. But note, it doesn’t include general civil unrest, riots or acts of war. “Many policies may exclude any payment to you if your trip is cancelled or interrupted due to riots or strikes,” says Podger. “And all seem to have exclusions for civil disruptions. As well, they all exclude any place the Government of Canada has issued a travel warning to. That alone will make your policy void.”

What if I’m kidnapped?

Likely not. So if you are travelling to a destination where kidnapping occurs regularly, or if you think you may be targeted, your best option is to buy specialized high-risk travel insurance that includes coverage for kidnapping, unlawful detention and ransom demands.

Beware the time limits

Be sure you’re aware of the time limits covered. For instance, Allianz Global Assistance’s travel insurance considers international and domestic terrorism to be a covered reason for trip cancellation if a terrorism event happens at your foreign destination within 30 days of the day you’re scheduled to arrive. But, you’re not covered if there has been a terrorist event at your international destination generally within the 30 days before your plan’s effective date.

So let’s say you buy travel insurance for a week of sightseeing in London with your son. Then the news reports that a bomb has gone off in the center of the city in an apparent terrorist attack. If you decide to cancel your trip, your travel cancellation insurance would reimburse you for travel costs, because you bought the insurance before the terrorist act happened.

But let’s say you book your trip, then a terrorism event happens in Turkey two weeks before your planned tour of the country. You’re worried now and decide to buy travel insurance to protect your trip. Before you leave, another bomb goes off in Turkey and you decide to cancel your trip. In this instance, your travel insurance would not cover your trip cancellation because you bought the plan within 30 days of a terrorist attack occurring at your destination.

As well, most policies have a stipulation regarding when you can buy the trip cancellation insurance, and it’s usually within seven days of the initial deposit you make for your trip. “The second you put down a deposit on your trip, the clock starts ticking,” says Podger. “If anything happens between the day you book and the end date of your trip, you’re covered. Some policies will even cover you for up to six months after you’ve booked the trip.”

Also worth noting is the fact that the higher the trip value, the more you pay for insurance. “It’s not the length of the trip that affects its cost, it’s the value of the trip,” says Podger. Generally, trip cancellation insurance that includes terrorism events costs about $5 to $10 for ever $100 cost of your trip. So for a $2,000 trip, it would cost between $100 and $200.

What if you want the right to cancel your trip because you’re afraid to go?

If you’re just fearful, and want to be covered if you have a change in plans for whatever reason—whether it’s terrorist related or not, you can get a “Cancel for any reason” plan. This is an upgrade to regular cancellation insurance and you will pay extra for it. As well, these policies cap the amount of money they will cover you for. For instance, it could be a percentage such as 75% of your trip value, or a dollar amount cap if you were to cancel.

So if you don’t feel safe for any reason, this type of policy allows you to cancel within specified time periods. You simply have to cancel your trip 48 hours before your departure.

What if I get injured during a terrorist attack on my vacation?

Travel medical policies will cover your medical treatment abroad for any reason—and that includes if you are a victim of a terrorism attack. “It’s like a seatbelt,” says Keon.

But check the fine print on your travel medical insurance as well. “If you have employer’s travel health insurance, check the details before you leave,” says Podger. “It may pay for only 50% of your medical bills abroad. “In that case you may want to top up your policy with more insurance from a travel medical provider.”

Will McAleer, president of World Travel Protection Canada is more blunt. “If you’re planning to stay for an extended period or time in a country riddled with terrorist incidents, make sure you get full health coverage for the entire length of your trip,” says McAleer. “Whether you’re in London or France or New York City …, with travel medical insurance, if you’re injured you’ll be covered. The peace of mind you get while on your trip will absolutely be worth it.”

Use common sense, whether you buy insurance or not

Of course, some precautions on your own to stay away from terrorism attacks before you book your trip—and during your trip— are just common sense and should be done regardless of the type of trip cancellation insurance you have. For instance, avoiding travel areas where there have been repeated terrorist attacks and kidnapping attempts, checking Government of Canada websites for recently issued travel warnings, and being alert to your surroundings by avoiding unlicensed cabs and making a habit of dressing inconspicuously so you don’t draw undue attention to yourself, says Podger. “Being vigilant is your first insurance against possible attacks.”

Your final to-do list

Check your coverage for acts of terrorism before you book a trip and find out about the many inclusions and exclusions by reading the Certificate of Insurance (found online on most insurance provider websites) for your specific trip cancellation and medical insurance product.

Also, check with the federal government and make sure you’re aware of travel warnings before you book your flight. If you’re going to a country that’s considered a little more dangerous than you’re used to, register with the Canadian embassy in that country so they know you’re there.

And if you need help deciding on the exact amount and type of insurance you need, seek out the advice of a travel insurance agent or underwriter. Organizations such as the Travel Health Insurance Association of Canada or the Canadian Life and Health Insurance Association can put you in contact with a travel insurance agent who can answer any questions.